Case T-53/06: Action brought on  21 February 2006  — UPM-Kymmene v Commission
Date: 2006-02-21
Institutions: Court of First Instance
Subjects: European Commission, Finland, action for annulment (EU), fine, packaging product, restrictive trade practice, subsidiary

8.4.2006

EN

Official Journal of the European Union

C 86/41

Pleas in law and main arguments

In 1970 a commitment was given to the promoters of Augh-
inish in respect of exemptions from customs duties on fuel oil
to be used in the production of alumina in the then proposed
plant at Shannon, Ireland. In 1983, the plant at Aughinish
into operation and the Irish authorities notified the
went
Commission that it intended to implement the commitments in
respect of the exemption from excise duty. The applicant states
that the exemption was furthermore authorized by virtue of
subsequent Council Decisions (1).
the Commission
raised the issue of State aid, which led to the institution of the
formal investigation and, finally, the adoption of the contested
decision.

In 2000,

In support of its application, the applicant submits that the
Commission is wrong in law in concluding that
the aid
concerned constitutes new aid, as opposed to existing aid.

According to the applicant, even if the aid constituted new aid
and was required to be notified upon its implementation in
1983, the Commission accepts that the aid was notified at that
the Commission to take any decision
time. The failure of
within the time periods devised by itself rendered the aid
concerned existing aid.
the Commission
treated the aid as existing aid at all material times, and the
unequivocal statement made by it in 1992 confirms this to be
the case.

In the alternative,

Furthermore, by virtue of Article 15 read in conjunction with
Article 1(b)(iv) of Regulation 659/1999 (2) since aid has been in
existence in excess of ten years and the limitation period speci-
fied therein has expired, the aid has become existing aid and
the procedures adopted by the Commission in relation to the
supervision thereof are flawed.

In relation to its first plea, the applicant also claims that the aid
was the subject of legally binding commitments entered into
on the part of the Irish authorities prior to accession in 1973.
According to the applicant the aid should have been found to
constitute existing aid on this heading alone.

The applicant pleads by way of additional plea that the decision
is in breach of the principle of legal certainty in circumstances
where it conflicts with the unanimous decision of the Council
taken on foot of a proposal submitted by the Commission. The
decision is also in direct conflict with the provision of Article
8(5) of Directive 92/81/EEC (3) on the approximation of the
rates of excise duty on mineral oils, which required the
Commission to submit a proposal in respect of distortions of
competition or incompatibility with the internal market for the
unanimous approval of the Council.

Furthermore, the Commission has allegedly infringed, at least
insofar as the beneficiary of the aid measure is concerned, the
principle of legitimate expectation in circumstances where the
Council has expressly authorised the derogation until 31
December 2006.

Finally,
it is submitted that the Commission has breached a
fundamental rule of law and has misused its powers by virtue
of its conduct, including its delay in taking the contested deci-
sion, having regard in particular to the fact that it was first
notified of
the
Commission disregarded the procedures contained in Directive
92/81/EEC, and made public statements regarding the compat-
ibility of the aid scheme in issue. By virtue of its conduct there-
fore, the Commission is estopped from ordering the recovery
of the aid in all the circumstances.

the aid in question in 1983.

In addition,

(1) 92/510/EEC: Council Decision of 19 October 1992 authorizing
Member States to continue to apply to certain mineral oils when
used for specific purposes, existing reduced rates of excise duty or
exemptions from excise duty,
in accordance with the procedure
provided for in Article 8 (4) of Directive 92/81/EEC (OJ L 316, p.
16) and other subsequent decisions.

(2) Council Regulation (EC) No 659/1999 of 22 March 1999 laying
down detailed rules for the application of Article 93 of the EC
Treaty (OJ L 83, p. 1)

(3) Council Directive 92/81/EEC of 19 October 1992 on the harmoni-
zation of the structures of excise duties on mineral oils (OJ L 316,
p. 12)

Action brought on 21 February 2006 — UPM-Kymmene v
Commission

(Case T-53/06)

(2006/C 86/80)

Language of the case: English

Parties

Applicant: UPM-Kymmene Oyj (Helsinki, Finland) [represented
by: B. Amory, E. Friedel, F. Bimont, lawyers]

Defendant: Commission of the European Communities

Form of order sought

— Partial annulment of the Decision insofar as it concluded
that Rosenlew Saint Frères Emballage participated in the
Valveplast meetings at the European level from 18 July
1994 until 31 January 1999 and that a single and contin-
uous infringement was formed on the basis of Rosenlew
Saint Frères Emballage's brief participation in the Valveplast
meetings (from 21 November 1997 until 26 November
1998) and its cooperation in the French meetings on open
mouth bags;

C 86/42

EN

Official Journal of the European Union

8.4.2006

— an order for a reduction in the amount of the fine imposed

on the applicant under the Decision;

Second, the applicant submits that the Commission erroneously
assessed the duration of Rosenlew Saint Frères Emballage parti-
cipation in the cartel activities.

— an order that the Commission reimburse the applicant for
the unduly paid portion of the fine, with interests starting
from the date of payment of the fine until full and final
reimbursement by the Commission; and

Third, the applicant contends that the Commission failed to
give proper consideration to the fact that the applicant was
held liable only in its capacity as parent company and, in so
doing, breached the principle of fairness.

— an order that the Commission pay for the costs of the

proceedings.

Fourth, the applicant submits that the Commission failed to
consider certain mitigating circumstances and wrongly attrib-
uted the aggravating circumstances of recidivism.

Pleas in law and main arguments

the substantive truth of

The applicant seeks the partial annulment of the Commission
Decision C(2005) 4634 final of 30 November 2005 in Case
COMP/F/38.354 — Industrial bags. The applicant does not
contest
the facts established, but
submits that the Decision contains various errors of assessment
of the facts concerning the applicant's subsidiary Rosenlew
Saint Frères Emballage and its role in the cartel activities, and
seeks a reduction of the amount of the fine imposed on the
ground that it is unjustified and disproportionate.

In support of its application, the applicant alleges errors of fact
in the application of Article 81(1) CE. The applicant submits
that the Decision is vitiated due to the absence of evidence of a
single and continuous infringement committed by Rosenlew
Saint Frères Emballage. Second, the applicant submits that the
Commission wrongly assessed the duration of the infringement.
According to the applicant, the Commission failed to establish
that Rosenlew Saint Frères Emballage took part in cartel activ-
ities in the block bags sector and participated in the Valveplast
meetings at the European level as of 20 December 2004. In
addition, the applicants states that there is insufficient proof of
Rosenlew Saint Frères Emballage's involvement in the meetings
of the French group on open mouth bags until 31 January
1999.

Finally, in relation to the setting of the final amount of the fine,
the applicant objects to the Commission's characterisation of
the cartel as a very serious infringement of the competition
rules, given the cartel's limited effect on competition and
geographical scope.

The applicant also submits a breach of the rights of defence in
that, during the administrative phase, it was not granted access
to certain relevant pieces of evidence that were relied upon by
the Commission to establish the duration and the scope of the
infringement committed by Rosenlew Saint Frères Emballage

Action brought on 23 February 2006 — Low & Bonar and
Bonar Technical Fabrics v Commission

(Case T-59/06)

(2006/C 86/81)

Language of the case: English

Parties

furthermore submits an infringement of

The applicant
the
general principles of proportionality, equal treatment and fair-
ness, and errors in assessment in setting the fine.

Applicants: Low & Bonar plc (Dundee, United Kingdom) and
Bonar Technical Fabrics NV (Zele, Belgium) [represented by: L.
Garzaniti, lawyer, M. O'Regan, Solicitor]

First, the applicant claims that the Commission exceeded the
limits of
its discretion under Article 23(3) of Regulation
1/2003 by setting a starting amount for its fine that is dispro-
portionate to the gravity of the infringement committed. In this
regard, the applicant challenges the application of a deterrent
factor of 2 and contends that the market share held in 1996 in
the industrial bags market covered by the overall cartel was not
the appropriate basis for calculating the basic amount of the
fine.

Defendant: Commission of the European Communities

Form of order sought

— Annul

the Contested Decision of

the Commission, no.
C(2005)4634, of 30 November 2005,
in case COMP/F/
38.354 — Industrial bags in its entirety, insofar as it relates
to the applicants; or